Chargeable event

[SuffolkMan]

I have cashed in a bond that's in joint names with myself and my wife and received a Chargeable Event Certificate. The certificate shows chargeable gain £40,467 Tax paid £8,131 with 10 years since start. I am already paying tax at 40% and when I include 50% of the gain/tax paid on my self assessment return I have to pay additional tax because of the 40%. My wife only earned £5K last year and paid about £400 of PAYE tax which will be refunded. Her share of the gain includes 20% tax of £4,066 which is not refunded though. So I am getting an additional bill but she cannot get a refund. Seems a bit unfair. Anything I can do?

[bd6759]

The "tax paid" is not tax that you have paid. It has not been deducted from the amount payable to you. It is a notional amount designed to cover your basic rate liability. This is on the basis that the financial institution will have paid corporation tax on its profits on the underlying investments

[maths]

Unfortunately there is nothing you can now do.

You/wife are separate taxpayers.

The tax shown as paid on the certificate is in effect a credit (at the basic rate of 20%) for tax paid by the life insurance company on its funds (this assumes the life company is not offshore).Hence if you are subject at 40% on the gain your liability is a net 20%.

As you say this notional credit is not recoverable by your wife.